FCRA Compliance with DOT

The Fair Credit Reporting Act, 15 U.S.C. § 1681 is U.S. Federal Government legislation enacted to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. Organizations that provide background check services are usually considered to be Consumer Reporting Agencies. Performing background check services requires that the employer adhere to specific rules and regulations and may be subject to fines for infractions.

In order to be compliant with the FCRA, the following procedures must take place.

• Permissible Purpose – Must have an approved reason to conduct a background check (employment).
  
  
• Disclosure – Prior to ordering a background check, a disclosure must be provided to the applicant or employee. Disclosure statements cannot be included on an application and must be presented in clear and conspicuous writing. Once an employee is hired, if you plan on running periodic background checks then that must be clearly stated within the disclosure.
  
  
• Authorization – The employer must obtain written authorization (1) from the applicant or employee that they have received the disclosure, and consent to allow the consumer report, as well as research conducted about them.
  
  
• Adverse Action Process and Summary of Rights – If the employer decides to take adverse action against an applicant/employee based on the information contained in a consumer report the following actions must take place.
  • The applicant/employee must be given a pre-adverse action notice, a copy of their Consumer Rights afforded by the FCRA and a copy of the report from which adverse-action is being considered.
  • The applicant/employee be afforded a suitable amount of time to review and challenge the consumer report with the Consumer Reporting Agency.
  • After any challenge has been re-investigated and resolved, or a suitable time for a challenge has expired, a final adverse action letter may be provided to the applicant/employee, along with another Notice of Consumer Rights.

The FCRA Adverse Action Guidelines require the employer to follow this procedure regardless if the information in the consumer report informing your employment decision was not the sole factor in determining the decision.

Beyond the FCRA, you must consider other federal regulations such as EEOC and ADA, as well as more localized laws, such as the “ban the box” laws which set forth expectations for use of criminal records.

(1) - Certain positions regulated by the Department of Transportation (DOT) may not be required to obtain a written signature. For example: exceptions may apply to some truck drivers who are on the road, which makes it difficult to obtain a written signature. Employers are still required to provide notice orally, electronically, or in writing and must obtain consent to proceed with a background check report but can be done verbally (over the phone). This exception applies to limited positions in the transportation industry and employers should consult their legal counsel to determine if they are qualified for such, or any, exceptions.

DISA’s Background Compliance Team offers background check services and will assist employers with becoming and staying FCRA compliant as it relates to adverse action.

DISA will assist in the adverse action process by providing our corporate clients with three email notifications consisting of a pre-adverse notice, a summary of rights under the FCRA, a copy of the background report, and an adverse notice (required only if employment is denied based solely on the background check).

DISA provides all the above-mentioned information for corporate package orders, and it is the employer’s responsibility to send the information to their candidate. Under the FCRA, the employer, not your administrator, is responsible for following the adverse action process. If you have any questions or concerns regarding your adverse action process, DISA can help!

DISA Consortium Program

If you are a part of DISA’s consortium (site access) program, the adverse action letters are mailed directly to the applicant by DISA.